Two SLPA lands for mixed development in a quest for dollars
The government is going ahead with the long term leasing of state lands in Colombo for mixed development projects in public private partnerships in an apparent bid to attract foreign direct investment at a time of drying up of dollar reserves.
The Sri Lanka Ports Authority (SLPA) is spearheading this real estate development initiative making maximum use of its unutilised lands located in and out of Colombo for such mega projects with the aim of raising much needed foreign exchange, a Ports and Shipping Ministry memorandum revealed.
A waterfront mixed development project is the latest public private partnership at a former stone quarry, in Mahara which is now filled with water.
The SLPA owns this 8-hectare land in Mahara, Ragama used to extract granite to build the port long time ago, and which is now up for lease to a prospective foreign investor.
It has been planned to develop this plot of land under a mega project comprising residential, urban, cultural, and institutional as well as recreational facilities, the cabinet memorandum indicated.
The cabinet of ministers had approved this proposal presented by the Minister of Ports and Shipping recently to develop the land as a Public Private Partnership (PPP).
In another land deal, the SLPA is setting up a service supply unit in Bloemendhal near the port where official quarters for staff are located.
The National Ports Master Plan of the SLPA has recognised the urgent need of developing service supplies and related activities of the Colombo Harbour. It has been planned to operate this harbour and related service supply centre in the Bloemendhal area at Grandpass.
This block of land owned by the authority is set to be utilised to set up the South Asian Freight Service Supply centre to meet the increasing container handling demand following the commencement of partial operations at East and West Container Terminals in 2023.
This expansion of supply service facilities with the customs’ service limits near the South Asian Gateway Terminal (SAGT) and the East Container Terminal (ECT) will become essential with the anticipated increase in container handling demand in two terminals, Ports Minister Rohitha Abeygunawardena said.
The Colombo International Container Terminal (CICT) has submitted a project proposal expressing its interest in this project as it has already taken over the container handling and service supply operations.
This project came under heavy critisism and protests of port workers while trade unions have organised demonstrations demanding the government to cancel the project as it will not be beneficial for the country.
The proposed ‘In-House Container Freight Service Station’ of the SLPA will be built on a 5.3 acre site at the Battenburg and Bloemendhal area in Colombo located in close proximity to the Unity Container Terminal of the SLPA.
CICT will implement the project under Build, Operate and Transfer (BOT) system with an investment of US$150 million plus $25 million for capital investment for Phase 1 of the project, the cabinet memorandum revealed.
A 35-year lease agreement will be signed with the SLPA to set up this facility in which Sri Lanka has a 30 percent stake out of which 15 percent will be owned by the SLPA, according to the memorandum.
According to Treasury observations, this land transaction is not much beneficial for the country as it is handed over to CICT on a 35 year lease basis under BOT system and the return on public investment is minimal due to low percentage of 30 percent shareholding of the state.